Japan’s declining birthrate and ageing population have been a problem for quite some time now, and the government and various local authorities have been trying to increase the population, but unfortunately, so far these policies have not been effective and efficient. However, this is not just a problem for Japan, but for all so-called developed countries. The population of the world is at the limit of 10 billion people, but that limit is expected to be reached around 2050, due in part to explosive population growth in developing countries.
The irony is that some developing countries are experiencing population growth while lacking daily living and food, while developed countries, where daily life is relatively stable, are experiencing an ageing population.
Australia, like other developed countries, has an ageing population. This is affecting the labour market, the social security system and health services.
Employment of older people
The employment and work of older people in Australia has been on the rise in recent years: data for 2023 show that the labour force participation rate of people aged 65 and over is 15.7%, up 3.4 percentage points from 12.3% a decade ago.
Several factors can be attributed to this increase.
An increase in the starting age for superannuation payments
Introduction of superannuation (defined contribution) schemes
Improvements in the health status of older people
The starting age for older people’s pension benefits is set to increase to 67 by 2024, following reforms by the Labour Government in 2009. This is intended to promote the labour participation of older people and reduce social security costs.
Superannuation schemes are compulsory defined contribution pension schemes introduced in 1992. The scheme allows older people to invest part of the pension they receive in retirement themselves.
The health status of older people has been improving in recent years. This is due to advances in medical technology and increased health awareness. Improved health has also enabled older people to work longer.
The Australian Government has implemented the following policies to encourage older people to participate in the workforce
Easing the requirements for receiving an older people’s pension
increasing vocational training opportunities for older people
provide support to businesses that promote the employment of older people.
Workforce participation of older Australians is expected to increase further in the future.
There are a number of benefits to the Australian economy as a result of the increased labour participation of older people.
Reducing labour shortages
Controlling social security costs
Promoting economic growth
The older workforce contributes to the reduction of labour shortages. In Australia, labour shortages are a concern due to declining birth rates and immigration. Greater labour participation of older people will help to solve this problem.
The labour participation of older people will also help to reduce social security costs. The total amount of pensions received by older people will decrease due to the increase in the starting age of pension payments to older people. The participation of older people in the workforce can further reduce the amount of pension payments.
Furthermore, the labour participation of older people also promotes economic growth. The labour force of older people creates new consumer demand and stimulates the economy.
However, there are some challenges to the labour participation of older people
Worsening health conditions
Lack of digital skills
Older people tend to be in poorer health compared to young people. It is therefore important to improve health care and preventive health care in order for older people to continue working for longer.
In addition, a lack of digital skills is an issue in today’s increasingly digital world. Older people tend to lack digital skills compared to young people. It is therefore important to increase opportunities for older people to acquire digital skills.
Furthermore, some employers have a prejudice against employing older people. It is therefore important to promote a better understanding of employing older people to employers.
The Australian Government is taking the following initiatives to overcome these challenges
Improving health care and preventive health care for older people
Improving digital skills education for older people
Promoting employers’ understanding of employing older people
Other challenges exist to keep older people working, such as adapting to changes in the labour market and the impact of health conditions on employment. Some older people require vocational training or retraining to take on new occupations, for which programmes and subsidies are required. Unemployment insurance and outplacement support are also important factors in providing older people with a sense of financial security if they lose employment and making it easier for them to find new employment opportunities.
Furthermore, employers need to raise awareness and improve the working environment. The experience and knowledge of older workers is an important asset for companies, so employers need to be proactive in recruiting older workers. In the working environment, barrier-free workplaces and appropriate working conditions are important to ensure that older people can continue to work.
A range of government initiatives and not-for-profit programmes are underway in Australia to address these challenges. As initiatives to support employment of older people are strengthened, it is expected that older people’s position in the labour market will be improved and their employment opportunities expanded in the future. Cooperation across society is essential, and initiatives are required to ensure that older people have a sense of economic and social stability and are able to maintain a high quality of life.
It is anticipated that the Australian Government will continue its efforts to promote the participation of older people in the workforce.